Apple, the leading global brand in technology, recorded a major feat at the end of the trading session for the week by becoming the biggest publicly listed company in the world. This feat was recorded when Apple’s shares gained over 10% to a record high on Friday after reporting impressive quarterly results.
Apple has now overtaken Saudi Aramco (Saudi’s state-owned oil company) to become the world’s most valuable publicly listed company.
Apple’s stock ended the trading session at $425.04, putting its market valuation at $1.82 trillion, according to the share count the company provided on Friday.
Saudi Aramco, which had been the most valuable listed company since going public in 2019, now has a market capitalization of $1.760 trillion as of the end of the last trading session.
How it happened: Recall that Nairametrics, about a day ago, revealed how Apple Inc’s Q3 revenue smashed Wall Street forecasts in spite of COVID-19 restrictions, showing that consumers bought more new iPads, iPhones, and Mac computers to stay connected during the COVID-19 era.
Fiscal third-quarter revenue stood at $59.7 billion, a record for the June period, Apple disclosed in a statement. That was up 11% from a year earlier and beat analysts’ estimates of $52.3 billion.
The feat recorded by Apple on Friday was its largest one-day percentage gain since March 13, and it added $172 billion in market value during the trading session on Friday.
Google’s advertising revenue plunges
Google Properties revenue dropped 8% to $25.13 billion.
Google, the world’s most popular search engine firm, was the only one out of the four major technology companies (including Amazon, Facebook, and Apple) that failed to impress investors with its Q2 2020 earnings results.
Why Google shares plunged: Google Properties revenue dropped 8% to $25.13 billion as against estimates of $24.98 billion. That segment includes advertising and services revenue from Gmail, Google Play, YouTube, and Google Search.
Alphabet shocked investors on Friday by reporting a decline in Google’s advertising revenue year-over-year for the first time in history. Consequently, Alphabet’s class A (Google’s parent company) share price closed at $1,482.96 after losing about 3.17%, breaking its strong support level of $1,500.
Stock traders’ growing concern over Google’s ability to raise its revenue from advertising was partly responsible for the unimpressive performance in its share price
However, the search engine giant reported quarterly profit of nearly $7 billion on revenue that topped $31 billion after removing traffic-acquisition costs.
“We’re working to help people, businesses, and communities in these uncertain times,” said Sundar Pichai, Chief Executive Officer of Google and Alphabet. “As people increasingly turn to online services, our platforms — from Cloud to Google Play to YouTube — are helping our partners provide important services and support their businesses.”
Why you shouldn’t sell the stock yet: Amid all the bad macros stated above, YouTube advertising revenue surged by 6%, even as Alphabet’s latest business segment, cloud computing business, got 43% bigger in Q2, 2020
“In the second quarter our total revenues were $38.3B, driven by the gradual improvement in our ads business and strong growth in Google Cloud and Other Revenues,” said Ruth Porat, Chief Financial Officer of Alphabet and Google. “We continue to navigate through a difficult global economic environment,” she added.
Glencore, world’s biggest fuel trader, hits huge trading profit amidst volatile oil market
Glencore’s shares rose 1.4% to 179.48 pence by 9.24 am in London.
Top commodity trader and world’s biggest shipper of fuel, Glencore Plc, expects an impressive trading profit for the year, hitting the top end of its target, as the commodities giant joins other big oil companies who are making a huge fortune from the volatile oil market.
Bloomberg had reported that the oil and commodity trader has reported almost $1 billion in earnings before interest and taxes in oil trading in the first half of 2020, similar to what was earned for the full year 2019.
Income from oil trading has played a big role in sustaining the energy sector, which has been badly hit by the coronavirus pandemic this year. Anglo-Dutch giant, Royal Dutch Shell Plc, on Thursday, disclosed that the oil company recorded the best performance in its trading business for last quarter.
Also, the French oil rival, Total SE, said that it was able to exploit the extreme price volatility during April’s unprecedented supply glut. The 2 giants made small profits against expectations of losses with the help of trading units, which exploited the market prices when they were down.
The trading units of European oil and gas majors have shielded their second-quarter results from the full force of the coronavirus induced collapse of oil demand and prices, although according to the published results, huge write-downs by these firms showed the magnitude of the challenge ahead.
The Chief Executive Officer of Glencore, Ivan Glasenberg, on Friday said, ‘’Our marketing business has also risen to the challenge, delivering robust counter-cyclical earnings. A very strong first-half performance allows us to now raise our full-year 2020 EBIT expectations to the top end of our $2.2-$3.2 billion guidance range.’’
Glencore revealed that during oil prices crash in March and April, traders were able to buy and store huge volumes of cheap crude before selling them later for higher prices, a trade known in industry jargon as a contango play. Still, putting more money into these trades led to an increase in net debt.
The trading profit will be a relief for Glencore. Once again, the miner and trader have missed out on an iron rally that has provided bumper earnings for its biggest rivals, such as Rio Tinto Plc and Anglo American Plc. Glencore’s mining profits are driven by coal and copper, but it has no exposure to the steelmaking ingredient.
Glencore is the world’s biggest shipper of the fuel and has previously taken steps to defend the market. In 2015, during the oil price crash, the company made big cuts to its output, thereby helping the fuel rally as demand recovered.
Glencore’s shares rose 1.4% to 179.48 pence by 9.24 am in London. The stock has lost nearly a quarter of its value this year. Glencore helped the FTSE 100 bounce back on Friday following a US data-driven slump in the previous session.
Apple, Facebook record impressive earning results in spite of COVID-19 disruptions
Apple Inc’s Q3 revenue smashed Wall Street forecasts in spite of COVID-19 restrictions.
Two global tech juggernauts — Apple and Facebook, have lived far beyond global investors’ expectations with their latest earnings results. The companies’ financial results, which were released late last night, showed Apple and Facebook recorded an impressive surge in revenue in spite of the COVID-19 pandemic.
Apple Inc’s Q3 revenue smashed Wall Street forecasts in spite of COVID-19 restrictions, showing consumers bought more new iPads, iPhones, and Mac computers to stay connected during the COVID-19 era. Apple shares gained about 6.3% in extended trading.
Apple, which is the world’s largest tech company, also disclosed a four-for-one stock split after its stock gained more than 80% in the past year.
Fiscal third-quarter revenue stood at $59.7 billion, a record for the June period, Apple disclosed in a statement. That was up 11% from a year earlier and beat analysts’ estimates of $52.3 billion, according to a copy of the consolidated financial statements which was seen by Nairametrics.
Apple’s Chief Executive Officer, Tim Cook, was quoted in a press statement by the company to have said that the company’s positive performance is indicative of the important role the company’s products play in people’s lives.
“Apple’s record June quarter was driven by double-digit growth in both Products and Services and growth in each of our geographic segments. In uncertain times, this performance is a testament to the important role our products play in our customers’ lives.”
Why it’s happening: cheap access to funds in 2020 has helped global stock traders in placing more bets in growth stocks such as Apple and Facebook, thereby resulting in their astronomical rise in valuations in spite of COVID-19. These companies also have good macros in their businesses, partly due to low debts, high-profit margins, and the fact that more people are isolated and mostly working remotely.
Focus on Facebook’s financial performance
Meanwhile, Facebook Inc’s Q2 financials beat analysts’ highest estimates, gaining growth from a COVID-19 pandemic-fueled disruption in global digital advertising in 2020. The company’s apps continue to bring new users.
Facebook reported that its revenue surged by 11% to $18.7 billion, compared with the $17.3 billion forecasted by analysts. Facebook’s main social app logged 2.7 billion monthly active users in the period in review compared with the 2.63 billion average estimates of analysts polled by Bloomberg. Shares jumped about 6.5% in late trading.
This impressive earning result boosted Facebook shares gaining as high as $254 in extended trading t, on track to set a new record after closing at $234.50. The stock had gained 14% so far this year.
Meanwhile, Stephen Innes, the Chief Global Market Strategist at AxiCorp, said it looks like a bargain to buy US stocks now, in spite of the high valuations recorded recently in the U.S stock market. In a note to Nairametrics, he explained that “for stock market investors, it is all about the zero forever Fed policy that makes equities look much less expensive on forwarding price-earnings ratios for 2021 through 2023 as the Fed is likely on a lengthy and extended hold. With interest rates low forever, you’re buying future earning forever from a ridiculously cheap present value perspective.”